I have decided what I want to be when I grow up. I want to be a tech analyst.
No, don't bother to try to talk me out of it. My mind is made up. It's the only job I have ever heard of where you can have huge gaps in your knowledge, get random but truly vital facts utterly wrong, say the opposite of what is observably true, and nobody sues you. They don't even fire you. They don't even notice. No one says a word. In fact, they actually pay you good money, and the next time they want to know something, they forget you got it all wrong the last time and ask you for your opinion all over again.
Being a fortune teller might be just as easy. In fact, I met one once, by chance, and she confided in me what she did for a living and confessed, just between us girls, that she just made stuff up. But I think analysts get paid more, and I believe they get retirement benefits too. And of course it's steadier work.
The target of PJ's rant was Yankee Group analyst Laura DiDio.
I discovered today that I've got a similar opinion of fellow Yankee Group analyst Mike Goodman.
A blurb on CIO Today entitled "ITunes Dominance in Peril" suggests that - even though Apple has sold over 250 million songs through the iTunes service since its launch, is now selling over a million songs per day, and is responsible for 70% of online music sales - its "days of...overwhelming dominance may be numbered."
And why might that be? According to Mike, it's because they have "shown no interest in the up-and-coming subscription business model for online music."
EXPLAIN THAT AGAIN?
The 'subscription model' is what is used by the current incarnation of Napster: your music is tied to one to three PCs (it's "portable" if you happen to have a laptop), you can't burn CDs or transfer music to a portable player, and if you stop making your subscription payments, all 'your' music goes poof. Bye!
You can, of course, pay extra to have permanent copies of your music. Thanks, but that's what I wanted in the first place.
Mr. Goodman is excited about the 'Janus' digital rights managment technology in Microsoft's newest version of Windows Media Player - which enables 'tethered downloads,' so that music services can "tie individual downloads to a monthly subscription." (I'm sure Microsoft picked 'Janus' to evoke the Roman god of doorways and openings - but the fact that he is depicted as literally being two-faced lends an unintentional ironic overtone to the technology.)
"Apple certainly has the option of jumping onto the tethered download bandwagon, Goodman noted. But it has given no indication of doing so. That decision may cost it a drop in the sales of its immensely popular iPod music players from an 80-90 percent market share down to 50-60 percent, Goodman predicted."
Sorry, but I can't follow your logic, Mike.
First of all, let's talk about being tethered. Do you want to be tethered? I don't. If I've purchased music, I want to be able to play it on my stereo, in my portable music player, and on my computer. I want to be able to burn CDs for my cars. And most importantly, I sure as heck don't want it all to expire.
What happens, for example, to all the playlists and music you're 'leasing' from Napster if they get sued into oblivion again? I'll tell you - the same thing that happened to all the DIVX discs that people bought from Circuit City when they finally pulled the plug. They will become inaccessible and worthless.
I am absolutely astounded at the industry pundits who have forgotten the lesson of DIVX:
Building a product with artificial limitations that are intended to allow you to charge the same consumer over and over for same product, and expecting it to compete against services that don't, is a stupid idea.
There is nothing about being tethered that serves the consumer. "You can fool some of the people some of the time," but in the long run, it's doomed to fail. I sure can't see any compelling reason to choose a service with tethering over iTunes.
And for the life of me, I can't see how tethering technology will impact iPod sales at all. Where is the advantage to the consumer in using a tethered format? If I have to pay extra to download my subscribed tracks from my tethered service to my portable player, then I'm spending more than I would have if I had simply bought them from iTunes in the first place.
If all I'm after is personalized streaming radio, I can get that for free from Last.fm. (Although they'd appreciate a donation.)
And if the selling point is that it's cheaper - well, Apple hasn't been selling truckloads of iPods on cost anyway.
And like it or not, it's still pretty darned easy to download endless gigabytes of MP3s without paying for them at all. I can't tell you how - or if - the music industry will solve that one, but I can tell you that it's not going to be by expecting consumers to adopt a format which is specifically designed to artificially limit their choices.
So, why does Mike Goodman claim that a new DRM scheme is going to topple Apple's dominance? Well, if I were being cynical like Groklaw's PJ, I'd claim that it's because the tech analysts have stumbled into an incredible racket, where they can say damned near anything they want, even if it is entirely devoid of logic, and still make big bucks and get published in USA Today.
If I was being cynical like me, on the other hand, I'd say that it's because tech analysts, by and large, don't get paid to accurately predict the future.
They get paid to tell industry executives what they want to hear - and to provide excuses for those same executives when their mind-bogglingly stupid marketing decisions go down in flames. If you're sufficiently devoid of scruples, it is a heck of a racket.